Yes thanks for the opportunity. Couple of questions. Just want to understand about utilization. I want to understand our optimal utilization range. Yes, so my question is about utilization. What is the optimal utilization range you are looking for? And in the context of it if I look at headcount addition, it is roughly a percent of this quarter, where we are expecting some of the large-deal ramp-up to play out in the next few quarters. So in that context, if you can provide some sense, that is question one.
So Dipesh utilization we are at 82% for the quarter. We think that is a good number because in our utilization we count pressures as well. Also the other thing you have to note around headcount is while we have declared a headcount addition of 400 odd from that number we have subtracted 600 people of advantage growth. If the business had been continuing as is, this quarter would have seen a 1000 people headcount improve.
Yes thanks for the opportunity. The first question is, if I look at FY2025 and step out the inorganic growth based on my estimate, we have roughly done a mid-teen kind of organic growth. And if I look at also the announcement on Sabre deal plus other acquisitions, it looks like that the coming year with these announcements will also contribute 15% growth automatically through Sabre and inorganic acquisitions. So is it fair to assume the growth momentum what we have seen in FY2025 which is upwards of 30% can be maintained in FY2026 as well?
We cannot give a number based guidance Sandeep but I will just reiterate what we said. We expect very strong growth in FY2026 as well without qualifying the number; the growth should be very strong. Not at all. I do not see organic growth slowing in any shape or manner in FY2026 or FY2025
Thank you for the opportunity. Guys, I just wanted to ask on your net other income, it continues to be negative and just wanted to check if this could be a strong lever for PBT margin growth next year.
So a couple of things. If you look at our presentation, we have explained where the net other income is coming from. So there are two things there. Number one there is interest on borrowings, which is there on the working capital. That is number one. And then there is least discounting, which is a standard because of the right of income assets that is being created. But yes over a period of time, once the working capital utilization starts going down, and with the improvement in the cash flows, the interest income will start going up and will become a lever for PBT expansion. But right now with the growth that we are sitting at and with the working capital requirement that we have and we continue to pay dividends. So we believe that at least we'll continue for a year or two for now and then we will kind of start thinking of PBT or interest other income as a lever for market expansion.
Hi thank you for the opportunity and congrats team on a great quarter. So I have got a couple of questions. Firstly, as you mentioned right over the past eight years, the growth has been quite significant, but would you agree that this is probably going to be an extended period of downturn for the industry? And if so, does the deal win engine have to kind of permanently pivot towards large deals and cost takeouts or there is still room for discretionary and in other areas that is one. The second question is on the Sabre ramp up. Could you please tell us how the margins have been impacted in the short term and how should we model that? And just on the margins as well, right, I mean how should we expect the reported EBIT margins to expand from here on in terms of margin walk?
Abhishek thanks for both the questions. As far as the pivot towards large deals is concerned, that is a pivot that we have embraced over the years. That is not just a pivot that we have done that is part of our approach towards sales, irrespective of the macros, discretionary spends up or down, we continue to focus on managed services based proactive solutions led large deals that is not going to change. Difficult for us to comment at this stage in terms of how long the demand downturn is going to last, irrespective of the demand downturn, as you would have noted from our tone, all three of us, we are confident that the large deal velocity and the large deal median size will continue to grow for Coforge. As far as Sabre margins are concerned, it will not have any downward dip in our margins. Saurabh had guided to the fact that by fiscal year 2027, reported EBITDA, I am not talking adjusted, reported EBITDA will hit 18%. This year you have seen we are at 16.6%. We will deliver on that pledge.
Hi thanks for taking my question and congrats Sudhir and team for a solid performance yet again. So, Sudhir, two questions from my side. One is in terms of growth, you had called out that the pipeline also looks quite healthy at this point of time, despite the very strong bookings that we have had in this quarter. So again, I mean, it is just because we are operating in an environment in which there is quite a benign commentary by a lot of our peers. How do you see this basically pipeline shaping out over the next few quarters? Any specific pockets that you want to call out in which we have seen very good strength that you believe could be the driver of the deal wins next year. The next year growth is of course taken care of by the deal wins this year, but what could be the driver or what segments could you see be the driver of next year's deal wins?
Sure so the drivers in our case, the two areas we are focused on are the same areas that John talked about, transformation and legacy modernization. There is always the cost play that we are always aware of. We expect growth to come from multiple quadrants, not just one or two. If you just reflect back on the five large deals that we have signed in the current quarter, Q4 when the industry in general has been struggling. One of course was clearly the Sabre win. The other deal is a very interesting deal where we are offering GPU as a service at scale. The third one was for one of the largest banks AI led QE services and QE for AI. The fourth has been a very large Salesforce led win again for a bank and the fifth has been a very interesting $62 million TCP win from one of the top three clients of the erstwhile Cigniti organization. So it is not just one pillar. It is not just one vector from which we are exploring deals. We see significant avenues. So it is a mixed bag. I will talk about the pros and the cons both. On the con side, given the recent change in geopolitics impacting global economy, we are seeing travel industry take a more cautious approach in increasing capacity and sharing their own outlook. Specifically there in the US, while year on year reported travel bookings and revenue are higher for travel and hospitality, a number of companies have reported reduced velocity. And there is a fear of booking cancellations in the near term. More or less the same commentary in Europe.
Hey thank you. Maybe just wanted to talk about the outlook to start with. So yes thanks for taking my call. I wanted to get a sense of the outlook outside of the Sabre deal. We understand that will be a significant component of the growth outlook. But outside of that, if you can share, how does the overall momentum look like, given the environment has probably weakened a bit? And if you can give us any kind of update about the medium term target of hitting $2 billion in revenues.
As I said, Ankur, we do not believe that the velocity of large deal closure and in Q4, as I just shared, we signed five large deals. Sabre was only one of them. We do not think the velocity or I mean if you leave out Sabre, the median size is going to deteriorate for us. We understand, we acknowledge and I just shared the commentary around travel as well that the demand outlook has worsened. But given the pipeline that we already have, given the sales orientation, which is very sharply structured on proactive proposal creation, we would expect the velocity, we would expect the median size of these large deals to sustain. As far as $2 billion is concerned, we would not like to share a timeline, I mean given our performance of late, given the commentary you heard, we feel we are going to get there pretty soon. Actually let me make that very soon without qualifying further areas. Oh no, I do not think there is any risk at all to fiscal year 2027 getting to 2 billion. The intent will be to get there faster. We would be a little disappointed if it took us all of us fiscal year 2027 end to scrape by to 2 billion dollars.
Thank you for the opportunity and congratulations for the steady performance. My question is for Saurabh. Saurabh, if you could help us understand how does the number of working days in April, May, June differ and should be a tailwind to sequential growth in the current quarter. If you can provide some insight into that. And the second question is with regards to the margin outlook, if you could talk about the different margin levers, especially in context of the lower ESOP charge as well as sales and marketing expenses outside of ESOP expenses and the gross margin proportion that we should be seeing in FY2026.
So couple of things. One when we look at number of days, so yes, there will be a leverage coming in and that is why I said that between Q3 to Q4, it was a tough quarter and there were lesser number of days. Even when we did a 100 basis point margin expansion in the current quarter, number one. Number two, like you remember that we had given wage hikes in Q2 last year. So again, it is not happening in Q1 for sure this year, which means that there is no depression on margins that is going to come in Q1. And we believe that we will be able to sustain margins that we are delivering now. Apart from that, we believe that the EBITDA margins or the gross margin should hold or gross margin should marginally expand. So that is number one. Number two, from a lever standpoint, 13.2 is the EBIT exit in Q4. As you know that by Q3, this ESOP cost is going to come down from current levels almost by 70-80 BPS further. That is going to flow down into EBIT number in Q3, which will get marginally set up with whatever rate hikes will happen at that point in time. But we believe that between 13.2 to 14 odd percent EBIT, guidance increase that we have, a large part will get covered this year, largely on account of structural changes that have happened in the business.
Hi good evening. Thanks for taking my question. First question is on Sabre deal and it is a question that is asked to us very frequently by investors. Given the financial situation of Sabre, do we foresee any risk of ramp down or any challenge to receivables or receivable days? And if at all any risk mitigation that we kind of use to protect ourselves?
So Abhishek, a couple of things. One, we have been working very closely with the leadership team of Sabre. And this is one of those accounts wherein we not only have a connect with the CIO organisation or the CTO organisation or the CMO organisation, but also to CFO and CEO and even at board level. So that is point number one, which allows us to get insights on what the strategy of the business is, what they're planning to do and what are the future steps they are going to take. That is number one. Number two, they very recently announced a sale of their hospitality business, which we were not supporting. It was a small business, roughly $250-300 billion of annual revenue and $1.1 billion to pay off their debt. So we were aware of it. So out of the debt of $4.7-$4.8 billion, $1.1 billion will be shaved off. And they have always been operating at a debt of $3.5 billion. So we continue to monitor. The point I am making is that we continue to monitor their financial performance, their business strategy very, very closely. And obviously, we have also taken non-recourse factoring and we have also taken a credit insurance policy in case anything unforeseen happens.
Congratulations on great set of number and thank you for the opportunity. So my question is around the GCC business. So any colour on our GCC business, how is it ramping up and how significant is becoming in our Asia geography because our Asian geography is significant revenue growth in this matter. So is it primarily driven by GCC or GCC is just a part of the higher end growth in Asia geography.
Asian growth is not being driven by GCC Vaibhav, but a lot of our growth is being driven by GCC's. GCC driven or GCC influenced revenue is almost 10% of our aggregate revenues as we speak. The largest deal that we are pursuing right now also is a GCC specific deal currently. So short answer, Asia growth is not necessarily a function of GCC growth, but a lot of our pipeline is significantly influenced by our GCC growth.
Hello congrats on a great start of numbers. So I have two questions. Cigniti is offering, in one vertical they are offering testing related services. So how that particular division is now integrated in this consolidated entity and providing some synergy benefit to the existing business of the Coforge and in the advent of this AI related disruption how this is muted offering on real-time basis will not get impacted by this AI disruption at all and second what risk you see in FY2026 and 2027.
Cigniti QE out of the five large deals that I talked about, two of the large deals were influenced by our AI for QE and QE for AI-based offerings. That is a hard data point in terms of how successful the Cigniti business, especially the AI-driven QE has been. Second, in November this year, given our confidence around the AI suite in QE, we are organising an event in New York City, four hours workshop, inviting every analyst there is in the world just to talk about the differentiation that we have built, which was part of our premise around acquiring Cigniti in this space. Third, the Cigniti QE team has been fully integrated into the Coforge unit. There is no longer internally, if you look at us, a standalone Cigniti team. QE is now a horizontal business unit. As far as the risks are concerned, no outsized risk that I can call out when it comes to the revenue. We have not given a guidance, but the confidence that you hear in our tone. We believe we have considered most risk scenarios. We have most importantly considered the demand downturn that our industry is dealing with. And after baking all of that, we still feel extremely confident about what we have shared with you.
Hi thanks for taking my question again. Sudhir just a question on the Sabre deal again. I mean, more of a subjective kind of assessment if I could ask you for. So, I mean, it is very seldom that we see a company of our size, mid-tier company grab such a large deal. These large deals had always been the kind of forte of the large cap companies that we had always seen. Now, you mentioned, of course, that this was a longstanding client. We have had a longstanding relationship and our domain expertise in the travel vertical is also known. But is there a kind of a paradigm shift in which more and more companies like our size are being called for large cap companies? In your pipeline, are there any more large deals that you are chasing?
Thank you for the question, Vibhor. With our size, we believe we are within touching distance. It is a question of which year we touch $2 billion. We are no longer a small firm as we see ourselves and as our clients see us. With 33,000 engineers across the world, hopefully likely to be 50,000 pretty soon. It is a fairly significant cohort of engineering talent that we have. The Sabre deal was won against two of the largest SIs in the world. When I look at the final shortlist of four, two of the folks who were against us were two of the largest SIs that do play within our industry. We believe the Sabre deal was won not just because of our industry expertise and travel, but also because of the iterative series of workshops around the engineering solution that we deliver for Sabre, which gave them comfort to choose us as their deep engineering partner for a 13-year period.
Sudhir, just very quickly on the client complaint that we, you know, it is been an ongoing issue for the past, I guess, 18 months, but just a brief update on that and how do we expect to sort of close this?
Thank you for the question, Abhishek. The client complaint claims that a hacker tricked service desk agents into resetting employee passwords, allowing access to the client's customer loyalty database. It misrepresents the company's engagement terms, role regarding the database, and the service desk agent responsibilities. The company did not handle and when I say the company, I mean, Coforge, the company did not handle core cybersecurity services for the client. We had no access to or responsibility for the database, and we were not involved in its management. We are consulting our insurance provider and consulting legal counsel regarding the complaint. The liability amount cannot be determined at this time. We do not want to comment on the name of the client, but the company continues to serve the client regularly since the last 18 months. The client is not a material client of the company and does not form part of even the top 50 clients of the company.